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CBSE Questions for Class 10 Elements Of Book Keeping And Accountancy Depreciation Quiz 3 - MCQExams.com

Interest debited to asset account in which method of depreciation?
  • Annuity method
  • Depreciation fund method
  • Insurance policy method
  • Revaluation method
An asset was purchased for Rs. 12,500 and under the reducing balance method 20 percent of the reducing value of the asset is written off each year. What is the value of the asset at the end of three years?
  • Rs.8,000
  • Rs.7,500
  • Rs.6,400
  • Rs.5,000
The cost of a machine is Rs. 2,000. Two years later the book value is Rs. 1,000. The straight-line percentage depreciation is _________.
  • 50%
  • 33−1/3%
  • 25%
  • 20%
Which of the following is/are advantage(s) of the equal installment method?
Easy to understand; calculation simple;
Decreasing depreciation charges cancel out increasing repair charges;
No re-calculation necessary when further assets are purchase.
  • 1, 2 and 3
  • 1 and 2 only
  • 1 only
  • 3 only
Consider a piece of machinery costing Rs. 30,000 with an estimated life of 10 years. At the end of this time it can be sold for Rs. 3,000. Using the equal installment method the annual charge against profits would be ________.
  • Rs.3,300
  • Rs.3,000
  • Rs.2700
  • Rs.300
The amount of depreciation remains constant year after year under ____________.
  • Written Down Value Method
  • Straight Line Method
  • Sinking Fund Method
  • Annuity Method
The portion of the acquisition cost of the asset, yet to be allocated is known as ___________.
  • Written down value
  • Accumulated value
  • Realised value
  • Salvage value
Original cost of a machine was Rs. 2,52,000; Salvage value was 12,000. Useful Life was 6 years, Annual depreciation under Straight Line Method will be __________.
  • Rs.42,000
  • Rs.40,000
  • Rs.30,000
  • Rs.28,000
A Company purchased a machinery on April 01, 2000 for Rs 1,50,000. It is estimated that the machinery will have a useful life of 5 years after which it will have no salvage value. The depreciation charged during the year 2004-05 was ______________.
  • Rs. 50,000
  • Rs. 40,000
  • Rs. 30,000
  • Rs. 10,000
Suraj Ltd. purchased a machine on 1.1.2003 for Rs 1,20,Installation expenses were Rs 10,Residual value after 5 years Rs 5,On 1.7.2003, expenses for repairs were incurred to the extent of RsDepreciation is provided under straight line method. Depreciation rate = 10%. Annual Depreciation = _________
  • Rs 13,000
  • Rs 17,000
  • Rs 21,000
  • Rs 25,000
In the books of D Ltd. the machinery account shows a debit balance of Rs. 60,000 as on April 1,2003. The machinery was sold on September 30, 2004 for Rs. 30,000. The company charges depreciation @ 20% p.a. on diminishing balance method. Profit/Loss on sale will be ____________.
  • 13,200 Profit
  • 13,200 loss
  • 6,800 profit
  • 6,800 loss
Original cost of an asset was Rs. 2,52,000. Salvage value was 12,000. Depreciation for 2nd year @10% p.a under WDV method will  be
  • 21,600
  • 22,680
  • 30,000
  • 28,000
J.P. Ltd. purchased a machine for Rs. 15,000 on 1st April 1997, Depreciation is .provided @ 10% on written down value method. Depreciation for 1998-99 will be:
  • Rs. 750
  • Rs. 1,350
  • Rs. 1000
  • Rs. 1,900
Original cost of an asset was Rs. 1,00,000. Life 5 years. Expected salvage value was Rs. 5,Hence Depreciation for 3rd year as per straight line method is ___________.
  • Rs. 8,550
  • Rs. 20,000
  • Rs. 19,000
  • Rs. 26,250
Amit Ltd. purchased a machine on 01.01.2003 for Rs. 1,20,000. Installation expenses were Rs. 10,000. Residual value after 5 years Rs. 5,000. On 01.07.2003, expenses for repairs were incurred to the extent of Rs. 2,000. Depreciation is provided under straight line method. Depreciation rate is 10% Annual Depreciation will be ____________.
  • Rs. 13,000
  • Rs. 17,000
  • Rs. 21,000
  • Rs. 25,000
A company imported a machine on 01.07.2002 for Rs. 64,000, paid customs duty and freight Rs. 32,000 and incurred erection charges Rs. 24,000. On 01.07.2004, one third portion of the imported machinery was sold for Rs. 13,920. Depreciation is to be calculate at 20% p.a on straight line basis. Profit/Loss on sale will be:
  • Rs. 10,080 (Profit)
  • Rs. 9,800 (Profit)
  • Rs. 9,800 (Loss)
  • Rs. 10,080 (Loss)
Under which method of depreciation, the value of machinery never comes to zero?
  • Straight line
  • Diminishing value
  • Sum of years' digit
  • Sinking fund
An asset is purchased for Rs. 60,000 and Rs. 2,000 is spent on its installation. The useful life of plant is 10 years and the essential scarp value is Rs. 6,000. Annual Depreciation under the original cost method would be _______________.
  • Rs. 6,200
  • Rs. 5,800
  • Rs. 5,600
  • Rs. 5,400
Given that the value of furniture on 1−1−2001 is Rs.80,000 furniture purchased during the year is Rs.40,000, sale of furniture on no loss on profit basis is Rs.20,000 and the furniture is valued at Rs.70,000 on 31.12.2001, the depreciation for the year 2001 will be _______________.
  • Rs.10,000
  • Rs.30,000
  • Rs.50,000
  • Rs.70,000
Reducing balance method of depreciation is ____________.
  • where amount of depreciation does not change from year to year
  • where amount of depreciation increases every year
  • where the amount of depreciation decreases every year
  • none of the above
Under the straight line method of depreciation, the amount of depreciation is :
  • Same every year
  • Reduced every year
  • Increased every year
  • All of these
Q Ltd. acquired machinery on 1st January 2011 at a cost of Rs. 72,000 and spent Rs. 8,000 for its installation. The firm writes off depreciation at 10% p.a on the original cost every year. The books are closed on 31st December every year, Closing balance of machinery account for 1st and 2nd year as per fixed instalment method will be Rs. _______
  • 72,000, 64,000
  • 74,000, 66,600
  • 74,000, 72,000
  • 74,000, 66,000
Z Ltd. acquired machinery on 1st January 2011 at a cost of Rs. 72,000 and spent Rs. 8,000 for its installation. The firm writes off depreciation at 10% p.a on the original cost every year. The books are closed on 31st December every year. Depreciation for 1st and 2nd year as per fixed instalment method will be Rs. ________
  • 6,000,6,000
  • 8,000, 8,000
  • 8,000, 7,200
  • 6,000, 8,000
Which of the following is/are disadvantage of fixed instalment method of charging depreciation?
  • The assumption that the asset shall be equally useful throughout its life seems to be illogical.
  • It does not take into account the effective utilization of the asset.
  • Depreciation remains constant under this method over the useful life of the asset, hence true financial results cannot be shown by this method if use of the asset differs from year to year.
  • All of the above.
A manufacturer owns three machines - the first acquired on 1.1.2011 for Rs. 1,10,000, the second on 1,7,2013 for Rs.90,000, and the third on 1.10.2015 for Rs. 1,30,000. He expects to use each machine for ten years and realize the scrap for Rs. 10,000. Using the straight-lie method what is his depreciation for the year ended 31.12.2015?
  • 33,000
  • 21,000
  • 30,000
  • 12,000
Under the diminishing balance method of providing depreciation, depreciation is charged__________.
  • at fixed rate on the reducing balance every year
  • at reducing rate on the fixed amount every year
  • at reducing rate on the reducing balance every year
  • none of the above
Which of the following is/are advantage of Reducing balance method/WDV method?
  • Under this method it is easy to calculate depreciation rate.
  • Income tax authorities do not accept this method.
  • The efficiency and usefulness is more in early years so depreciation amount is also more in early years and goes on diminishing year to year.
  • All of the above.
Under ______ method depreciation is provided as a fixed percentage of the written down value of the asset.
  • Fixed instalment method
  • Annuity method
  • Reducing balance method
  • All of the above
Machinery costing Rs. 20,00,000 was purchased on 1.4.The installation charges amounting Rs. 5,00,000 were incurred. The depreciation at 10% p.a on straight line method for the year ended 31st March, 2013 will be -
  • 1,50,000
  • 2,50,000
  • 2,00,000
  • 50,000
Original cost = Rs. 1,26,000. Salvage value =6,000. Useful Life =6 years. Annual depreciation under SLM = ?
  • Rs. 21,000
  • Rs. 20,000
  • Rs 15,000
  • Rs. 14,000
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